Some of the biggest companies in America are getting more aggressive when it comes to cash management – and suppliers getting pinchedProcter & Gamble is the latest company to extend to the amount of time it takes to pay its suppliers, in a move that will free up as much as $2 billion in cash, the WSJ’s Serena Ng reports. P&G currently pays its bills on average within 45 days — faster than the 60 to 100 days that other large companies generally take. But it’s looking to move its payment terms to 75 days and recently started negotiations with suppliers. To help take the sting out of the changes it’s implementing, P&G is working with banks that will offer to advance cash to suppliers after 15 days for a fee.

Companies likeDuPont andJ.C. Penney are also trying to cut the amount of cash tied up in day-to-day operations by taking more time to pay suppliers, collecting faster from customers or reducing manufacturing and inventory costs. DuPont has freed up over $2.6 billion in cash from its day-to-day operations over the past four years and is looking to do more. “You don’t want to have excess cash tied up in the company that’s not generating any value,” says CFO Nick Fanandakis.

But the moves are creating ripple effects, Ng writes. Companies that hold on to cash longer create deficits at suppliers that have to find financing, raise prices or squeeze other firms along the supply chain. And smaller companies could see their costs rise, pinching funds that could otherwise be spent on hiring or investments.

THE DAY AHEAD:

Analysts are likely to zero in on expenses whenBank of America reports this morning. MoneyBeat’s David Benoit says the way for BofA to drive earnings higher “lies largely in removing costs that subtract from the bottom line.”

After markets closeeBay is expected to report slightly higher quarterly earnings. As Ahead of the Tape’s Spencer Jakab notes, acting as a middleman and facilitator, as eBay does, is a lot more profitable at the moment than Amazon’s broader ambitions. And eBay is generating cash from a surge in mobile transactions and growth in developing markets.

Markets flash: Asia ended higher. But European shares are lower on some downbeat economic data out of the U.K. DJIA futures are down.

EXCLUSIVE ON CFOJ:

Loan volume drops as refinancing activity slows. Fewer investment-grade companies are taking out loans this year, because they’ve already locked in low rates and don’t feel the need to refinance, Vipal Monga reports. The volume of transactions in the investment-grade loan market, at 136 deals between January and April 15, is the lowest it’s been since at least 1995 for comparable periods. Volume so far this year is down 49% from the 265 deals that had taken place as of April 15, 2012. Bank of America Merrill Lynch’s Peter Hall said many companies refinanced their loans in 2011 and 2012, and, as interest rates haven’t moved much lower since, don’t feel the need to refinance those borrowings. “There’s no reason to refinance unless you want another year of tenor.”

BlackRock CEO expects floating NAV on money funds. The SEC will likely impose a floating net-asset-value on money market funds as part of a reform initiative, said BlackRock CEO Laurence Fink. “I expect it’s going to be some sort of floating NAV,” Mr. Fink said in a conference call following the company’s first-quarter earnings. Mr. Fink said he expects the floating NAV will be imposed on prime funds that invest in short-term corporate debt, but not on funds that invest in government securities, Vipal Monga notes. As CFOJ reported in October, forcing the funds to float their NAV—and potentially report share prices below $1 a share—could make the funds less attractive for corporate treasurers whose main priority is to protect the value of their principal.

Longer-dated corporate debt seen hurting market liquidity. Companies hoping to lock in low interest rates have been making larger corporate debt offerings with longer maturities. But that’s making investors in the secondary market worry about holding illiquid corporate debt, Emily Chasan reports. Participants also said smaller issuers are being locked out of the market. “We have a problem in the long term,” Robert Smith, chief investment officer at Sage Advisory Services, said at an SEC roundtable in Washington, D.C. “It’s getting harder and harder for [investment] risk managers to find where they could get in and out of the market.”At issue, he said, are disaggregated pricing, closed networks, and the lack of market access in the bond markets. He also said the market has fundamentally changed, with about 40% of the market currently rated BBB, compared to 22% five years ago. The average maturity of corporate bonds, he said, has risen to 15 years, from eight a few years ago.

CORPORATE NEWS:

Coca-Cola CFO unfazed by yen’s drop.Coca-Cola CFO Gary Fayard doesn’t appear to be worried about the yen’s recent plunge. On yesterday’s conference call to discuss the company’s lackluster Q1 earnings, he said that Coke is fully hedged against the yen – along with the euro and British pound – for the rest of this year and into 2014. He added that the company also has “near-term coverage in place across several other currencies” that he didn’t name, and said currencies will be a 3% headwind against results in the current quarter and a 2% headwind for the year. Furthermore, Mr. Fayard said the company believes “that the weaker yen will ultimately be beneficial for the Japanese economy and for [Coke’s] business.” Read the conference call transcript here.

Coca-Cola also said it reached an agreement in principle to expand territorial distribution rights to five independent bottling partners, the WSJ reports. The move would allow it to keep production of brands including Sprite, Powerade, Minute Maid and Coke in-house but gradually parcel out distribution.

Goldman CFO: Economic uncertainty made clients cautious.Goldman Sachs CFO Harvey Schwartz painted the first quarter in cautious terms, saying client activity levels were mixed as the period wore on, MoneyBeat’s Liz Moyer reports. Goldman reported a 7.2% jump in profit, while revenue rose 1%. Mr. Schwartz said on the conference call that “macroeconomic uncertainty has been an understandable and persistent theme following the financial crisis and has quite naturally led many of our clients to approach strategic decisions with greater caution.”

Alstom executive arrested in FCPA crackdown. The U.S. arrested Frederic Pierucci, an executive of French engineering firm Alstom, at New York’s JFK Airport and charged him with participating in a bribery scheme to win business in Indonesia, the WSJ reports. The Justice Department also revealed that a former Alstom executive, David Rothschild, pleaded guilty in November to charges from the same bribery scheme. According to the indictment against Mr. Pierucci and the criminal information on Mr. Rothchild, the two men paid bribes to officials in Indonesia to help secure a contract as a power-services provider. They allegedly paid the bribes through two consultants in order to hide the payments. One of the consultants allegedly received hundreds of thousands of dollars in a Maryland bank account to be used to bribe an Indonesian Parliament member.Tesco takes huge write-down as it exits U.S. market. British retailer Tesco is pulling out of the U.S. and taking a $1.5 billion write-down, Reuters reports. Fresh & Easy, the U.S. business arm, has 199 stores and employs around 5,000 – it’s also absorbed over £1 billion pounds of capital since its 2007 launch. Tesco CFO Laurie McIlwee tells Reuters in this video interviewthat the U.S. business would have eventually turned a profit, but it would have taken too long and the company has better opportunities elsewhere.

Trafigura CFO: Bond markets luring trading houses. Pierre Lorinet, chief financial officer at commodities trading house Trafigura, tells the FT in this video interview about the company’s recent perpetual bond issuance. He says that trading houses are increasingly relying on bond markets to finance their operations. And he thinks that the low-interest rate environment will only bolster the practice.

ECONOMY:

Economists claim to find errors in key economic study. A new paper by economists at the University of Massachusetts claims that an influential study used by policymakers world-wide to justify austerity measures contains errors, the NYT reports. A 2010 research paper by Carmen Reinhart and Kenneth Rogoff of Harvard found that in countries with debt loads equivalent to or greater than 90% percent of GDP “median growth rates fall by 1 percent, and average growth falls considerably more.” The UMass study authors say they found some simple miscalculations or data exclusions that altered the results. According to their rerunning of the figures, “the average real G.D.P. growth rate for countries carrying a public debt-to-G.D.P. ratio of over 90 percent is actually 2.2 percent, not –0.1 percent,” they write. In other words, heavy debts were not associated with the malaise that Professors Reinhart and Rogoff — and much of the world’s economic elite — thought that they were. Read the UMass study here (PDF).

IMF warns of austerity risks. The IMF called on countries that can afford it to slow the pace of austerity measures, the WSJ reports. The fund warned in its semiannual report on economic growth that “overly strong” belt-tightening in the U.S. will slow growth this year and the sequester cuts were the “wrong way” to shrink the budget deficit. Underlining its growth worries, the IMF cut its economic forecasts for virtually every major region in 2013. It sees the euro-zone economy contracting by 0.3% in 2013, 0.2 percentage points more than it did in January.

REGULATION:

Time for auditors to open up. Audits have been impenetrable black boxes for too long and it’s time for number crunchers to open up, writes Helen Thomas in this Heard on the Street column. The revelations that a KPMG audit partner passed stock tips to a friend are embarrassing for the industry but have also refocused attention on auditors and what they produce. Central to the debate is who should keep shareholders informed of audit issues: the board or the auditors. The easy answer is both, Thomas says. “Investors want to hear from the accountants regarding the nitty-gritty of their work. The board can rightly add their view of the issues, as well as explaining steps taken to ensure a robust and independent process.”

Health-care share surge linked to lobbyist. A key source for a private report that sent health-care stocks on a tear earlier this month is a former top aide to Sen. Charles Grassley (R., Iowa), who is now a lobbyist for Humana, the WSJ reports. Mark Hayes’s email to Washington investment-research firm Height Securities, alerting it to a government decision that will save the industry billions of dollars, was a final piece of confirmation Height received before blasting a news alert to its clients. The Height report now is the subject of a preliminary probe from the SEC. The investigation represents the agency’s first known look at the political-intelligence industry, the business of collecting market-moving information from Washington and providing it to Wall Street.

CFO MOVES:

Plug Powernamed David P. Waldek as its interim chief financial officer. He succeeds Gerald A. Anderson, who resigned April 12, the same day that the company said it had received a delisting notice from Nasdaq for failure to maintain a minimum $1.00 share price. Mr. Waldek is a founding partner of CFO Advisory Group, LLC. Plug Power also promoted Jill McCoskey from controller to chief accounting officer. Mr. Anderson received compensation in 2011 valued at $788,215, according to aproxy filing.

UniTek Global Servicesfired Chief Financial Officer Ronald J. Lejman at the same time that it announced an audit had detected fraudulent activities at its Pinnacle Wireless division that resulted in improper revenue recognition. He is succeeded on an interim basis by Kenneth J. Cichocki of Pillar Solutions Group. The Blue Bell, Pa.-based company also terminated its chief accounting ffficer, Kevin D. McClelland, the president of Pinnacle Wireless, Michael Hayford, several other Pinnacle Wireless employees and one employee of the UniTek finance department. Mr. Lejman received compensation in 2011 valued at $1.4 million, according to a proxy filing.

Bumisaid it is beginning a search for a new chief financial officer, according to Dow Jones. The current CFO, Scott Merrillees, will focus on his role of CFO of Berau Coal and plans to step down on June 26.

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